Capitaline

Results 26-Jul-24

Analysis

United Breweries

Q1 volumes up 5% with premium volumes growing 44%

Consolidated net sales (including other operating income) of United Breweries has increased 8.81% to Rs 2475.13 crore. Sales of Beer segment has gone up 10.83% to Rs 5,810.63 crore (accounting for 99.99% of total sales). Volume in Q1 increased 5%, despite capacity constraints and restrictions in operations due to elections. The premium segment grew by 44% in the quarter. Within the segment, it expects strong growth for Kingfisher Ultra & Kingfisher Ultra Max and continue to drive premium volume growth.

Volume growth driven by Karnataka, Andhra Pradesh, Uttar Pradesh, Maharashtra, Haryana and West Bengal partially off-set mainly by Telangana & Delhi. Price mainly driven by Rajasthan, Karnataka, Andhra Pradesh, Maharashtra & Tamil Nadu with positive mix driven by premiumization & state-mix partially off-set by growth of the economy segment

Profit before interest, tax and other unallocable items (PBIT) has jumped 38.36% to Rs 334.63 crore. PBIT of Beer segment rose 30.46% to Rs 335.91 crore (accounting for 100.38% of total PBIT). PBIT of Non-Alcoholic Beverages segment rose 91.82% to Rs -1.28 crore (accounting for -0.38% of total PBIT).

PBIT margin of Beer segment rose from 4.91% to 5.78%. Overall PBIT margin rose from 4.61% to 5.76%.

Operating profit margin has jumped from 9.81% to 11.53%, leading to 27.93% rise in operating profit to Rs 285.40 crore. Raw material cost as a % of total sales (net of stock adjustments) decreased from 57.46% to 55.13%. Purchase of finished goods cost fell from 1.50% to 1.49%. Employee cost increased from 6.56% to 7.46%. Other expenses fell from 24.59% to 24.33%.

Other income fell 29.46% to Rs 7.35 crore. PBIDT rose 25.37% to Rs 292.75 crore. Provision for interest fell 4.22% to Rs 1.59 crore.

PBDT rose 25.58% to Rs 291.16 crore. Provision for depreciation rose 12.34% to Rs 57.72 crore.

Profit before tax grew 29.35% to Rs 233.44 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 59.64 crore, compared to Rs 44.13 crore. Effective tax rate was 25.55% compared to 24.45%.

Minority interest increased 92.31% to Rs 0.25 crore. Net profit attributable to owners of the company increased 27.41% to Rs 173.55 crore.

Promoters’ stake was 70.83% as of 30 June 2024 ,compared to 72.71% as of 30 June 2023 . Promoters pledged stake was 12.40% as of 30 June 2024 ,compared to 14.45% as of 30 June 2023 .

Investments in capex during the quarter were Rs. 47 crore, primarily in supply chain initiatives to cater for future growth. The company remain optimistic about the industry`s long-term growth potential, driven by increasing disposable income, favorable demographics & premiumization.

Full year results analysis

Net sales (including other operating income) of United Breweries has increased 8.30% to Rs 8122.68 crore. Sales of Beer segment has gone up 10.41% to Rs 18,374.18 crore (accounting for 99.97% of total sales). Sales of Non-Alcoholic Beverages segment has gone down 46.18% to Rs 5.35 crore (accounting for 0.03% of total sales).

Profit before interest, tax and other unallocable items (PBIT) has jumped 22.61% to Rs 886.19 crore. PBIT of Beer segment rose 19.81% to Rs 910.63 crore (accounting for 102.76% of total PBIT). PBIT of Non-Alcoholic Beverages segment rose 34.55% to Rs -24.44 crore (accounting for -2.76% of total PBIT).

PBIT margin of Beer segment rose from 4.57% to 4.96%. PBIT margin of Non-Alcoholic Beverages segment fell from negative 375.65% to negative 456.82%. Overall PBIT margin rose from 4.34% to 4.82%.

Operating profit margin has jumped from 8.22% to 8.57%, leading to 12.98% rise in operating profit to Rs 696.19 crore. Raw material cost as a % of total sales (net of stock adjustments) increased from 55.94% to 56.00%. Purchase of finished goods cost rose from 1.22% to 1.45%. Employee cost increased from 7.89% to 7.94%. Other expenses fell from 26.79% to 26.08%.

Other income rose 49.18% to Rs 73.74 crore. PBIDT rose 15.66% to Rs 769.93 crore. Provision for interest rose 48.49% to Rs 6.89 crore. Loan funds rose to Rs 102.03 crore as of 31 March 2024 from Rs 15.62 crore as of 31 March 2023. Inventories declined from Rs 1,427.81 crore as of 31 March 2023 to Rs 1,368.74 crore as of 31 March 2024. Sundry debtors were higher at Rs 2,313.84 crore as of 31 March 2024 compared to Rs 1,407.32 crore as of 31 March 2023. Cash and bank balance declined from Rs 395.29 crore as of 31 March 2023 to Rs 214.20 crore as of 31 March 2024. Investments declined from Rs 8.05 crore as of 31 March 2023 to Rs 7.97 crore as of 31 March 2024.

PBDT rose 15.43% to Rs 763.04 crore. Provision for depreciation rose 0.62% to Rs 211.9 crore. Fixed assets increased to Rs 1,932.77 crore as of 31 March 2024 from Rs 1,921.71 crore as of 31 March 2023. Intangible assets increased from Rs 6.45 crore to Rs 15.49 crore.

Profit before tax grew 22.36% to Rs 551.14 crore. Share of profit/loss were nil in both the periods. Provision for tax was expense of Rs 140.28 crore, compared to Rs 112.63 crore. Effective tax rate was 25.45% compared to 26.99%.

Minority interest increased 18.57% to Rs 0.83 crore. Net profit attributable to owners of the company increased 34.89% to Rs 410.03 crore.

Equity capital stood at Rs 26.44 crore as of 31 March 2024 to Rs 26.44 crore as of 31 March 2023. Per share face Value remained same at Rs 1.00.

Promoters’ stake was 70.83% as of 31 March 2024 ,compared to 72.71% as of 31 March 2023 . Promoters pledged stake was 12.40% as of 31 March 2024 ,compared to 14.45% as of 31 March 2023 .

Cash flow from operating activities has turned positive Rs 77.33 crore for year ended March 2024 from negative Rs 119.57 crore for year ended March 2023. Cash flow used in acquiring fixed assets during the year ended March 2024 stood at Rs 191.50 crore, compared to Rs 156.28 crore during the year ended March 2023.

The scrip is currently trading at Rs 2067

United Breweries : Consolidated Results
Particulars	2406 (03)	2306 (03)	Var.(%)	2403 (12)	2303 (12)	Var.(%)
Net Sales	2,475.13	2,274.79	9	8,122.68	7,499.92	8
OPM (%)	11.5	9.8		8.6	8.2
OP	285.4	223.09	28	696.19	616.23	13
Other Inc.	7.35	10.42	-29	73.74	49.43	49
PBIDT	292.75	233.51	25	769.93	665.66	16
Interest	1.59	1.66	-4	6.89	4.64	48
PBDT	291.16	231.85	26	763.04	661.02	15
Depreciation	57.72	51.38	12	211.9	210.59	1
PBT	233.44	180.47	29	551.14	450.43	22
Share of Profit/(Loss) from Associates	0	0	-	0	0	-
PBT before EO	233.44	180.47	29	551.14	450.43	22
EO Income	0	0	-	0	-33.12	-
PBT after EO	233.44	180.47	29	551.14	417.31	32
Taxation	59.64	44.13	35	140.28	112.63	25
PAT	173.8	136.34	27	410.86	304.68	35
Minority Interest (MI)	0.25	0.13	92	0.83	0.7	19
Net profit	173.55	136.21	27	410.03	303.98	35
EPS (Rs)*	#	#		15.5	12.4
Notes
* EPS is on current equity of Rs 26.44 crore, Face value of Rs 1, Excluding extraordinary items.
# EPS is not annualised
bps : Basis points
EO : Extraordinary items
Figures in Rs crore
Source: Capitaline Corporate Database

United Breweries : Consolidated Segment Results
	% of (Total)	2406 (03)	2306 (03)	Var.(%)	% of (Total)	2403 (12)	2303 (12)	Var.(%)
Sales
Beer	100	5,810.63	5,243.01	11	100	18,374.18	16,641.15	10
Non-Alcoholic Beverages	0	0.65	0	-	0	5.35	9.94	-46
Total Reported Sales	100	5,811.28	5,243.01	11	100	18,379.53	16,651.09	10
Less: Inter segment revenues		0	0	-		0	0	-
Net Sales		5,811.28	5,243.01	11		18,379.53	16,651.09	10
PBIT
Beer	100	335.91	257.49	30	103	910.63	760.09	20
Non-Alcoholic Beverages	0	-1.28	-15.64	92	-3	-24.44	-37.34	35
Total PBIT	100	334.63	241.85	38	100	886.19	722.75	23
Less : Interest		1.59	-1.66	LP		6.89	4.64	48
Add: Other un-allcoable		-99.6	-63.04	-58		-328.16	-300.8	-9
PBT		233.44	180.47	29		551.14	417.31	32

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